Midtown vacancies up for 2nd month running

By Adam Pincus | March 07, 2011 05:21PM

Source: Cassidy TurleyThe vacancy rate in Midtown Manhattan rose in February for the second month in a row, marking the first time since the middle of 2009 that the rate increased in back-to-back months, data from commercial services firm Cassidy Turley shows.

The uptick to 12.3 percent was fueled in February by several large blocks of space coming on the market, including floors to be given up by accounting firm Deloitte at Paramount Group’s 1633 Broadway when the company moves to 30 Rockefeller Center. The uptick broke from the general pattern seen over the past year, in
which vacancy rates have steadily fallen as the economy improved.

The vacancy rate for Midtown has jumped to 12.3 percent in February from 11.6 percent in December and 11.9 percent in January, Cassidy Turley said in its February report today. The last time the rate ticked up for two consecutive months was from May to June 2009 and June to July 2009, when it rose by 0.1 percent per month, from 13.6 percent to 13.8 percent.

“[The increase] really has to do with space coming on the market from tenants that were relocating,” said Robert Sammons, vice president of research for Cassidy Turley. He did not believe it was a serious erosion of the overall improvement seen in recent months.

“I think we are going to see a turnaround for Midtown over the next few months. I think it just happened that several blocks hit at the same time,” he said.

For Manhattan overall, the vacancy rate rose by 0.1 points, to 12.1 percent, in February, while overall asking rents rose by $0.25 per square foot to $48.34 per square foot, the report shows.

The city’s other office markets fared better than Midtown. For Midtown South, the vacancy rate dropped by 0.2 points in February to 11.7 percent, and Downtown, the rate declined by 0.1 points to 11.3 percent, according to Cassidy Turley’s figures.